CAPTION: The German chemical giant BASF, like the rest of the industry, is feeling the effects of sluggish global demand. (picture alliance/dpa/Uwe Anspach
The German chemical giant BASF, like the rest of the industry, is feeling the effects of sluggish global demand.
"Sales volumes were considerably lower than in the prior-year quarter across all customer industries – with the exception of automotive," BASF CEO Martin Brudermüller said at the company headquarters in Ludwigshafen, in the western German state of Rheinland-Palatinate, according to a press release. Sales and operating profit declined significantly in the third quarter. Below the line, the DAX-listed group made a loss because of its oil and gas subsidiary Wintershall. The chemical group is now more cautious about the outlook for the current year.
"We meanwhile expect sales and EBIT before special items at the lower end of the respective ranges," Brudermüller said. If chemical production fails to stabilize, risks arise from a further decline in volumes and a sharper reduction in prices. BASF had already launched an austerity program, including job cuts, due to declining sales and tougher conditions in Europe.
In the third quarter, sales fell 28.3 percent year-on-year to 15.7 billion euros, according to BASF. This was due to considerably lower prices and volumes overall. Negative currency effects also had a dampening effect. Earnings before interest and taxes (EBIT) and special items fell by 57.3 percent to 575 million euros. The bottom line was a loss for shareholders of 249 million euros. In the same quarter of the previous year, BASF had made a profit of 909 million euros.
Due to sluggish demand worldwide, the company intends to curb its costs even more than planned in the coming years. "In view of the macroeconomic environment, we have significantly reduced our capital spending on property, plant, and equipment for 2023 by 1 billion euros, down to 5.3 billion euros from the 6.3 billion euros announced in February," Brudermüller said in a conference call with journalists. In addition, he said, BASF will also reduce capital spending on property, plant, and equipment by a further 3 billion euros in total over the next four years.
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